Germany's KTG to expand soy crop, citing European demand for GMOs

HAMBURG, Sept 29 (Reuters) - Leading German farming company
KTG Agrar AG plans to expand soybean cultivation in
expectation of major demand for crops free of genetically
modified organisms (GMOs), its chief executive said on Monday.

The European Union produces only about 1.5 million tonnes of
soybeans annually. Farmers prefer the oilseeds rapeseed and
sunflower seed.

KTG, one of Europe's handful of listed farming operations,
sees great potential for GMO-free soybeans for products such as
soyoil, soy-milk and tofu, CEO Siegfried Hofreiter told Reuters.

"With meat consumption in Europe at best stagnating, I think
soybeans will be in demand as an alternative," he said. "I think
soybeans will be the meat of the future and that the market in
Europe will be massive."

Soybeans are cultivated on its farms in eastern Germany,
Romania and Lithuania.

"We started three years ago with 2,000 hectares of
soybeans," Hofreiter said. "This rose to 7,000 hectares
harvested this year, and next year we plan to expand this to
10,000 to 12,000 hectares."

As for production, he said, "This year we hope to harvest
about 20,000 tonnes, and next year we want to harvest
considerably more than 25,000 tonnes."

The company has bought seeds from regions including Serbia,
and there had been no climatic problems with cultivating in
Germany, although yields are lower in the cooler Baltic State of
Lithuania, he said.

"As soybeans are such a rare crop in Europe, there was less
of a problem with the type of insect pests that are more common
in areas where soybeans are extensively farmed," he said.

"I think the key point is that we are focusing on GMO-free
soybeans. I do not think Europe would have much success
competing against GMO soybeans from larger producers such as
Brazil."

KTG's soybean yields have been almost 3 tonnes a hectare
against about 2 tonnes in extensive farming regions, he said.

The company will largely process its soybean harvest itself
in its oil mill and other processing units.

KTG expects to harvest about 200,000 to 250,000 tonnes of
grain this year, largely wheat, maize, rapeseed, barley and rye.
The harvesting of some crops is still under way.

"About half the harvest was sold in advance earlier in the
year when prices were higher," Hofreiter said. "After deducting
what we use ourselves in our own food processing factories,
about 20 percent remains to be sold."

He added, "We will not seek more sales in the current low
market but will instead put grain into storage as we hope prices
will rise again in the winter."

Grain prices fell to their lowest in around four years in
September largely because of expectations of bumper corn and
soybean harvests in the United States.

Hofreiter said he remained optimistic about KTG's full year
2014 performance despite low grain prices, with turnover set to
rise to "significantly over" 200 million euros from 164.9
million in 2013.

Earnings before interest, tax, depreciation and amortisation
(EBITDA) are set to rise to around 50 million euros from 34.6
million in 2013 as the company benefits from the results of a
major investment programme, he said.
(editing by Jane Baird)